Real Time Bidding (RTB)

Written by Juan Daniel Fuentes

What is Real Time Bidding?

Real Time Bidding (RTB) is an online system of real-time auctioning of the position of each ad (and the impressions they generate) in each of the advertising spaces being bid on.

A process similar to that of other advertising systems

Although in this definition we are going to talk almost exclusively about display advertising, something similar to the Real Time Bidding we know today has been used for years in other types of online advertising. The clearest example is the well-known keyword bidding system in Google Ads (Google AdWords). Here, in fact, the system is the same because the different competitors will see their ad published if they win the bidding for their keywords first. This auction is carried out by a machine in real time and in milliseconds, as in the case of RTB, and there are also some aspects that influence more than simply the highest bidder winning, the operation is very similar, however, in the case of Google Ads the owner of the advertising space and the one who carries out the auction are the same, while in the case of RTB there is an intermediate subject between the advertiser and the owner of the advertising space.

This is how it works

Let’s imagine that we are an advertiser and we want to position our ad to impact our target in the most efficient way possible. For this purpose, we are offered advertising space on certain portals that have been identified as a showcase for our target audience. But of course, we are not alone, there will be many more advertisers willing to place their ad and automatically the auction of those spaces takes place.

When the advertiser wins the bid for a given space, the programmatic purchase has already taken place , that is, the process that makes Real Time Bidding possible. Likewise, the rest of the advertisers will also have the possibility of placing their ads in other spaces, winning their particular bid, since it is not only the monetary amount of the payment that comes into play, but also the characteristics of the advertiser. target that each advertiser is looking for, thus aligning the objectives of the advertiser and the portal that owns the ad space.

Let’s see how the process is carried out:

1. The famous Cookies. When you browse, the web pages collect your data and with them are shaping your user profile.
2. Once your profile has been created, an offer is sent to advertisers with whom you fit into their target audience (For yours and for many others of a similar profile)
3. Advertisers bid for that “package” of users whose profile matches their target (They bid for that target to see their ad in the advertising space assigned to them)
4. The owner of the advertising space evaluates the bids and chooses, at which time the winner’s ad is placed and the advertiser is informed.

All this intelligent exploitation of the information that brings supply and demand into contact in milliseconds is known as Big Data. This definition will be discussed in more detail in another section.